Keba Matlhako | Transformation Specialist  | The BEE Chamber | mail me |

In a significant move towards enhancing efficiency, transparency, and accountability in public procurement processes, the gazetted Public Procurement Act of 2024 (Act) aims to revolutionise the way government entities engage in procurement activities.

The new Act can be praised for its comprehensive approach to addressing critical issues and promoting good governance within the public procurement sphere.

Establishing a framework for preferential procurement

The objectives of the Act, as outlined with due regard to sections 24, 195, 216, and 217 of the Constitution, include regulating public procurement, establishing a framework for preferential procurement, and addressing matters connected therewith. Notably, the Act introduces the Public Procurement Office under the National Treasury, tasked with ensuring efficiency, compliance, integrity, transparency, and standardisation in procurement processes.

There are three key aspects of the Act that stand out as particularly promising:

• Consolidation of regulations

The Act consolidates various Acts and Regulations i.e. State Tender Board, National Suppliers Procurement Act and Preferential Procurement Policy Framework Act into a single, comprehensive framework, eliminating ambiguity and streamlining procurement policies. By aligning with constitutional principles of transparency and accountability, the Act provides a clear roadmap for procurement practices, enhancing control and oversight.

• Enables government to establish of thresholds

The Act introduces the ability to specify thresholds, set asides and pre-qualifications and subcontracting for different groups previously excluded from procurement opportunities with a specific focus on black people. This targeted approach ensures fairness and inclusivity, setting clear parameters for participation and empowering a broader range of stakeholders to engage in procurement processes.

• Combatting corruption

Through robust measures aimed at preventing external influences on government procurement, the Act introduces stringent safeguards to mitigate corruption risks. Provisions such as restrictions on government and State-Owned Enterprise (SOE) officials and employees from doing business with the state and disclosure where their family’s members and related people are bidding on tenders, coupled with a robust reporting and accountability framework, underscore the Act’s commitment to transparency and ethical conduct. The Act further introduces tribunal and processes to report, investigate and charge those that contravenes the act and its objectives.

This Act has the potential to enhance the efficiency, credibility, and integrity of public procurement practices.

Modernising the public procurement system

By addressing critical issues with a focus on effectiveness and sustainability. It also signals a significant step towards modernising the public procurement system and fostering a culture of accountability within government procurement processes. This legislation marks a pivotal moment in the evolution of Broad-Based Black Economic Empowerment (B-BBEE) policies and practices in the country, with far-reaching implications for businesses, government entities, and the broader economic landscape.

For companies operating in South Africa, doing business with the state and SOEs, compliance with B-BBEE requirements was put on a guillotine edge through the Preferential Procurement Regulations 2022 making B-BBEE a mere option as it was excluded from the 90/10 and 80/20 preference point system used for tender adjudication scoring and replaced by Specific Goals.

The Act will introduce a comprehensive framework than includes both B-BBEE credentials and Specific Goals in procurement bids, creating a clear path for inclusive economic growth driven by government procurement.

In conclusion

Government aims to leverage procurement spending as a catalyst for sustainable economic development and social progress.

We stand ready to support businesses, government entities, and stakeholders in navigating the complexities of the Act and maximising the opportunities to advance diversity, equity and inclusion. Through our comprehensive suite of advisory services, training programmes and initiatives, we remain committed to promoting excellence in B-BBEE compliance and driving transformative change in South Africa’s business landscape.

Related FAQs: South Africa’s new Public Procurement Act

Q: What is the significance of South Africa’s new Public Procurement Act?

A: The Public Procurement Act, signed into law on 23 July 2024, aims to enhance transparency and integrity in the procurement process by establishing a single framework that regulates public procurement across all organs of state, including public entities and government departments.

Q: How does the Public Procurement Act 28 of 2024 address issues of state capture?

A: The Act establishes a public procurement office tasked with overseeing procurement activities to prevent corruption and ensure that public funds are used efficiently and effectively, thereby addressing vulnerabilities that may lead to state capture.

Q: What are the main provisions of the Public Procurement Act?

A: The Act includes provisions for establishing a public procurement tribunal, regulating the procurement process for goods and services and ensuring compliance with preferential procurement policies, which aim to promote fair access to opportunities for various categories of persons.

Q: Who oversees the implementation of the Public Procurement Act?

A: The Act establishes a public procurement office that will be responsible for overseeing the implementation of the Public Procurement Act, ensuring adherence to the regulations and providing guidance to procuring institutions.

Q: What types of entities does the Public Procurement Act apply to?

A: The Act applies to all organs of state, including government departments, provincial legislatures and public entities, which must comply with the regulations set forth in the Public Procurement Act.

Q: Will the Public Procurement Act affect how public entities procure goods or services?

A: Yes, the Act will affect the procurement processes of public entities by mandating a more transparent and regulated approach to procuring goods or services, thereby improving accountability and integrity.

Q: How does the Public Procurement Tribunal function under the new Act?

A: The Public Procurement Tribunal, established under the Act, will serve as an independent body to adjudicate disputes arising from procurement processes, ensuring that all parties have access to fair and impartial resolution mechanisms.

Q: What measures are in place to ensure compliance with the Public Procurement Act?

A: The Act requires all procuring institutions to adhere to its provisions, with mechanisms for monitoring and enforcement put in place by the public procurement office to ensure compliance and accountability in the use of public funds.

Q: How does the Act impact the relationship between provincial legislatures and public procurement?

A: The Act requires that provincial legislatures align their procurement practices with the national framework established by the Public Procurement Act, promoting consistency and adherence to the principles of transparency and integrity across different levels of government.